The deadline by which banks have to go to the central bank and submit their new lending rules for approval expires at the end of this month. Bankers should start selling loans under the new regulations in February, which make it harder for customers to borrow in foreign currency.
However, only Greek-held Emporiki has announced it got the approval of the central bank to sell loans under the new rules so far, while other banks are now in various stages on the way to completing this process. ING Bank has made no official announcement, but it cut the maximum maturity of consumer loans (from ten to five years), which means it complied with new legal provisions.
The largest bank by assets, BCR, has yet to send its lending rules to the central bank. Its officials did not say when they planned to do it, only that they intended to comply.
Greek-held Banca Romaneasca is getting ready to submit its new rules soon.
Banks will be allowed to sell loans under the old rules until they get the central bank’s approval on the new ones, which is almost a mere formality whereby it makes sure loans offers comply with the new guidelines.
The branches of foreign banks, which did not have to secure BNR’s approval for their lending rules until now, have already been applying part of the regulation since December, allowing up 35% indebtedness.
Alpha Bank, the local subsidiary of the Greek group by the same name, is now waiting for an answer from the central bank about its new rules. At the same time, it is trying to make the most of the time it has left until the regulations to sell foreign currency loans change and has recently cut the down payment to 15% for a loan in euros, from the previous 25%.
Once the new regulations come into force, all banks will be required to ask 25% down payment on euro loans, while the minimum required for loans in other currencies will be at least 40%. Leu-denominated mortgage loans will be possible to sell with a 15% down payment, but customers usually avoid them because of higher interests.
About 97% of the mortgage loans granted by banks so far are denominated in euros, dollars or Swiss francs, because customers first look at the loan cost and then at the currency risk. There is an over 3% gap between the interest rate of a euro loan, 6.2% per annum, and the interest rate of a leu-denominated loan, 9.4% per annum.
Government-secured and refinanced loans will not be subject to the new provisions. The “First Home” scheme will not be affected, either, as the down payment will remain at 5% regardless of the loan currency.
(English version by Loredana Fratila-Cristescu)